Yahoo has escape clause for Microsoft deal

Yahoo’s search deal with Microsoft includes a number of escape clauses that allow the company to withdraw from the agreement.

According to the FT, Yahoo can back out if the combined market share of the two companies drops below a pre-agreed but undisclosed amount, or if Yahoo’s revenue falls below a set percentage of Google’s.

As it stands, the ten year deal will see Microsoft handle all search technology through its Bing engine. Yahoo will keep 88 per cent of the advertising revenue for the first five years, and then between 83 and 93 per cent for the remainder of the time scale.

In addition, Microsoft will pay Yahoo $50 million for each of the first three years to cover transitional costs.